Backed by some of the biggest names in tech, 42Floors is bringing unprecedented transparency to the commercial office space business
A Q&A with 42Floors co-founder and growth hacker Darren Nix. The San Francisco–based company was founded in 2011 and closed a $5 million Series A funding round in mid-November. Investors include Founder Collective’s Chris Dixon, 500 Startups’ Dave McClure, Thrive Capital’s Jared Kushner and Digital Sky Technologies’ Yuri Milner.
SUB: Please describe 42Floors and your value proposition.
Nix: 42Floors is an office space search engine and we’re taking the pain out of the office search process by giving users free access to the same information that brokers have.
SUB: Who are your target markets and users?
Nix: Small business owners. Most of our users are looking for offices in the 1,000 to 5,000 square feet range which means companies in the eight-to-40 employee range.
SUB: Who do you consider to be your competition?
Nix: Loopnet and Costar are currently the largest commercial real estate search tools.
SUB: What differentiates 42Floors from the competition?
Nix: First off, we’re completely free. Second, we’re going way beyond just posting a listing snippet with a building photo and square footage. We’re making it easy for users to decide ahead of time if they should go tour a space by posting lots of photos, floor plans, video, detailed descriptions, cost projections, etc.
SUB: When was the company founded and what were the first steps you took in establishing it?
Nix: We started working on 42Floors a year ago, November 2011. We knew users wanted this but we didn’t know if we’d be able to get the commercial real estate community—the office space owners and brokers—behind us. So, the first thing we did was start talking to people in the community about our plans. At the same time, we were building little prototypes of the site so that we could demo it.
We began signing up partners and slowly started growing our database of office spaces. All the while we were refining our prototypes based on feedback that people were giving us. We finally launched it in March 2012. Oh, and along the way we studied for our commercial real estate broker’s license.
SUB: What was the inspiration behind the idea for 42Floors? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Nix: There was an ‘aha’ moment. Jason’s fiancé [co-founder Jason Freedman], and now wife, is a commercial real estate broker and one day they were driving up to Tahoe for the weekend and she was kvetching about how much she needed better tech in her industry. Jason perked up and said, “I can do that.” The idea for 42Floors grew out of that.
SUB: How did you come up with the name? What is the story behind it?
Nix: Oh, there’s a method to the madness. It involves Vegas, the golden ratio, and set sorting algorithms. Can’t say more—it’s Floor lore.
SUB: What have the most significant obstacles been so far to building the company?
Nix: So far, I think our experience has been pretty typical for an early-stage startup. Finding great people to join a young startup is always hard and made harder by the tremendous demand for tech experts in SF. Then there’s the chicken-and-egg problem that every marketplace has—you need office spaces to get users but you need users to attract the supply side. I think we’re over the hump now, though.
SUB: You recently raised $5 million in Series A funding. What are your plans for the funds?
Nix: Grow. We’re going to hire a lot more engineers and we’ll be doing a lot of work to increase the number of listings, keep quality super high, and expand into new markets.
SUB: Why was this a particularly good time to raise more funding?
Nix: Our Seed round of $400K would not have lasted very long with a team of 10 people, and we wanted to keep on hiring. The funding makes that possible.
SUB: How does the company generate revenue or plan to generate revenue?
Nix: No revenue for now. We’re batting around revenue ideas but that’s a ways off. Whatever happens, the site will always be free for users to search.
SUB: What are your goals for 42Floors over the next year or so?
Nix: Hire, grow our database, attract more users, expand to new markets. Learn. Fix. Repeat.
42Floors – www.42floors.com